Benchmarks for the board room: corporate counsel metrics

“How’m I doing?” was former New York City Mayor Ed Koch’s trademark greeting to his constituents.

Lawyers may ask themselves the same question.

Lawyers who labor in a law firm often use the almighty billable hour as their primary measure of productivity.

But an attorney who works for a corporation may come at that billable-hour standard from the opposite direction. For the in-house counsel who hires and manages an outside law firm, the less time that law firm bills, the more readily the in-house lawyer can demonstrate her productivity.

A group of corporate lawyers is attempting to develop their own metrics, or performance standards, for corporate legal departments. Two of these lawyers described their “Open Legal Standards Initiative” yesterday to the Virginia Bar Association’s Corporate Counsel Fall Forum in Richmond.

Steve Lauer said he and Nena Wong co-founded OLSI “to help the in-house profession improve its business practices” and to develop methodology that lets corporate lawyers document performance in order to make comparisons within the legal field and within a particular industry.

In-house lawyers may know “they’re winning cases and handling transactions,” but their corporate bosses want to know “how much it costs and how long does it take?” Lauer said.

OLSI is a voluntary organization dedicated to developing uniform approaches to measure how law departments function, with the ultimate goal of using the data to improve performance.

Gathering good data can help lawyers learn “what can you do to reduce the number of lawsuits against your company, what can you do to reduce the cycle time for drafting contracts,” Wong said. And maybe, as a byproduct, you can “decrease the number of lawyer jokes” you have to hear from the non-legal types in the company.

The OLSI Web site identifies the top 25 “key performance indicators” that help measure cost effectiveness, staff productivity, process efficiency and cycle time. Tracking in-house time shouldn’t be the record-keeping burden that drove many lawyers from firm practice into corporate legal departments. Once law departments establish the right record-keeping habits, all they have to do is “rinse and repeat,” Wong said.